By Bill Hornbarger, Chief Investment Officer
THREE THINGS TO KNOW
- The 30-year Treasury bond had a total return in October of -4.25% as the yield increased 19 bps, from 1.45% to 1.64%, demonstrating that the current low yields heighten the risk of fixed income instruments with small yield changes resulting in noticeable price movements. (Source: Benjamin F. Edwards, Eaton Vance)
- $2.37 million is the cutoff to rank in the top one-tenth of 1% of all U.S taxpayers. $55,000 is the cutoff to rank in the top 40% of all U.S. taxpayers (Source: University of Alabama, IRS, MFS). Nick Saban, head football coach at the University Alabama, is paid $9.3 million annually. If Alabama paid Saban $2.37 million annually and the 126 players on the roster were paid $55,000 each, there would be no change in out-of-pocket expenses.
- As of October, average rent for an apartment in New York was $3,074, which is down48% from last year when the average rent was $3,519 and represents a 5.01% decrease from September when the average rent was $3,228. By contrast, during the same time, the average rent for an apartment in Memphis, Tenn., was $1,159, an increase of 12.25% over last year when the average rent was $1,017 and represents a 0.09% increase from September when the average rent was $1,158. The decline in rents is a symptom of the degree to which New York was hit by the pandemic and the resulting slowdown/halt of economic activity. (Source: Rent Jungle)
THREE THINGS TO WATCH
- Monday — The Senior Loan Officer Opinion Survey Released: Shows if banks have loosened lending standards after tightening them sharply in the spring.
- Thursday — October CPI released and is expected at 1.3% yoy and 1.7% yoy for core CPI. The dislocation in the economy due to the pandemic continues to be seen in slack economic and inflation data. Inflation remains notably below the Fed’s 2% average inflation target.
- Friday — University of Michigan Consumer Sentiment will be released and is expected to be mixed to slightly higher. In a recent report by the organization, consumers were described as discontent with recent surveys showing rising optimism and uncertainty. That report (“Winter of Discontent”) was quoted as saying “…Biden can be expected to improve the economic expectations of Democrats with new policies intended to speed the nation’s recovery and ease the financial setbacks among households. According to Republicans, Biden’s intent to raise taxes on the wealthy will have a significant negative impact on growth prospects for the overall economy.”